Silverjet, the low-cost business class-only airline, has appointed former Virgin Atlantic marketer Anna Lamont as its first marketing director (MW last week) in a move that underlines its rapid expansion. But the industry is split over how much of a threat the new business model poses to the sector’s biggest players.
Silverjet was founded by serial entrepreneur Lawrence Hunt in 2004 on the premise that business travellers were looking for a cheaper alternative to traditional business class services on the major airlines. It launched its first daily flights between London and New York in January this year.
The airline appointed M&C Saatchi and Media Planning Group to handle its advertising and media planning and buying last year, and hired Play as its digital agency earlier this month. Lamont has been recruited to develop a marketing strategy that will transform Silverjet into a household name.
Business class-only trends
US airlines EOS and MaxJet introduced similar transatlantic business class-only services in 2005. Both are thriving, with Eos operating a 48-seat premium service and increasing its air fleet, and MaxJet adding a route from Los Angeles to London in May.
The legacy carriers have already reacted to the new threat. Virgin Atlantic is launching an all-business class airline within the next 18 months flying to New York from a range of European cities, including London. It says the new airline will offer “better quality than existing all-business carriers”. British Airways is setting up a new subsidiary that will operate on all popular business routes from European cities.
Travel analysts believe the business class-only model is a trend that is here to stay. Travel consultant Eli Abeles, of ABS Consulting, says airlines such as Silverjet appeal to a new niche market of small businesses which have limited travel budgets and affluent travellers not satisfied with the standard of economy class.
Avoiding customer frustrations
Brewin Dolphin Securities leisure analyst David Pope believes travellers are becoming increasingly frustrated with hand luggage restrictions and check-in times – complications Silverjet can avoid at its private terminal at Luton Airport. Hunt cites his company’s swift boarding policy as a key attraction for its customers.
Pope says business class-only carriers are stealing passengers from the main carriers, who will eventually be forced to compete on price and service to maintain their market share: “The economic climate in the aviation industry is robust at the moment but when it becomes less stable we could see an all-out price war between the legacy carriers and business-class ones.”
Gary Jacobs, managing director of destination marketing agency Fox Kalomaski, points out that it is more difficult for small airlines to compete with traditional airlines when it comes to advertising spend. He says: “British Airways has a massive budget and promotes itself to all sectors of the market. But a smaller airline with a niche product and specific route has the problem of finding that particular flyer. Its marketing has to be much more targeted.” However, Jacobs thinks Silverjet is doing a good job of raising its brand profile.
Many believe Silverjet’s main drawback is that it only operates one route from a non-mainstream airport, which deprives it of passengers looking for greater flexibility and convenience.
Silverjet signed a letter of intent to lease two Boeing aircraft in June, which would bring its total to five and allow it to open up a new route. But it must continue to expand its fleet, destinations and flight frequency in order to build on its success so far.